Copper:
Overnight, both domestic and international copper prices trended higher. The spot import window for domestic refined copper has closed, while the SHFE copper VIX index rose rapidly to around 21.3. As the market enters a quiet period ahead of the Federal Reserve's interest rate meeting, focus has shifted to the US-Iran conflict. Yesterday, former President Trump dampened prospects for US-Iran talks, stating Iran desires talks but the US has "no interest," and promising to "soon" strike Iran's nuclear facilities. Additionally, US Trade Representative Greer hinted that the US will soon introduce new tariff policies to replace the expiring 10% global import tariffs. Regarding inventories, LME stocks fell by 4,350 tonnes to 290,925 tonnes; Comex stocks increased by 2,101 tonnes to 635,900 tonnes; SHFE copper warehouse receipts decreased by 1,676 tonnes to 33,415 tonnes, and BC copper warehouse receipts dropped by 226 tonnes to 5,904 tonnes. On the demand side, downstream consumers maintained purchases based on immediate needs, showing weak willingness to stock up at high prices. Copper prices achieved a three-day winning streak overnight, once again surpassing the 106,000 yuan per tonne level, with technical indicators beginning to improve. The sustained strength in copper prices is believed to be related to improving sentiment in both domestic and international financial markets. From a fundamental perspective, the recent rapid inventory drawdowns both at home and abroad have also provided investors with significant confidence. However, it should be noted that the US-Iran conflict is intensifying, and risks in overseas financial markets have not effectively subsided. Therefore, caution is still warranted regarding the potential upside of this rebound.
Nickel & Stainless Steel:
Overnight, LME nickel rose 1.12% to $17,100 per tonne, while SHFE nickel increased 0.77% to 131,090 yuan per tonne. Inventory-wise, LME stocks decreased by 1,182 tonnes to 272,040 tonnes, and SHFE warehouse receipts increased by 911 tonnes to 100,294 tonnes. Looking at premiums/discounts, the LME 0-3 month spread remained in negative territory; the import nickel premium/discount held steady at -50 yuan per tonne. On the policy front, on July 10th, Tri Winarno, Director General of Minerals and Coal at Indonesia's Ministry of Energy and Mineral Resources, clearly stated that the nickel ore RKAB quota for 2026 will not see a significant increase. Quota adjustments will focus solely on meeting the needs of smelting facilities currently facing nickel ore supply shortages. Indonesian President Prabowo confirmed that the one-stop export policy for strategic commodities will be fully implemented on September 1, 2026. PTDSI began operations on July 1st, aiming to improve export governance, plug loopholes in under-invoicing, and track foreign exchange repatriation. Data shows that in its initial phase, DSI has managed over $10.5 billion in foreign exchange, with the price gap between domestic and international sales narrowing significantly from 30%-45%. Taking crude palm oil as an example, a previous price difference of about 50% led to wealth leakage; the government will correct such practices through the single-window system, and violators will have their licenses revoked. Fundamentally, disruptions in sulfur supply have raised some cost and supply concerns for the hydrometallurgical sector. Inventory conditions also shifted last week. Multiple positive factors have stimulated the rise in nickel prices, but inventory pressure has also emerged. In the short term, nickel prices are expected to maintain a volatile pattern, supported by costs on the downside and constrained by inventory on the upside. Attention should be paid to the subsequent release of quotas and whether demand can further drive inventory reductions, thereby generating new momentum for nickel prices.
Alumina, Primary Aluminum & Aluminum Alloy:
Overnight, alumina prices showed firmness with slight volatility. The AO2609 contract closed at 2,729 yuan per tonne, up 0.22%. Open interest decreased by 383 lots to 307,000 lots. Aluminum prices also firmed with volatility. Overnight, LME aluminum closed at $3,161.5 per tonne, up 0.81%, with inventories decreasing by 1,500 tonnes to 278,300 tonnes. The AL2608 contract closed at 23,185 yuan per tonne, up 0.56%, with open interest decreasing by 2,071 lots to 260,000 lots. Aluminum alloy prices firmed with slight volatility. Overnight, the main AD2608 contract closed at 22,985 yuan per tonne, up 0.5%. Open interest increased by 60 lots to 19,451 lots. On the spot side, SMM's alumina price fell to 2,719 yuan per tonne. Aluminum ingot spot prices were at a discount of 10 yuan per tonne. Foshan A00 aluminum was quoted lower at 23,100 yuan per tonne, at a discount of 30 yuan per tonne versus Wuxi A00. Aluminum billet processing fees remained stable in most regions, with Nanchang up 50 yuan/tonne and Wuxi down 30 yuan/tonne. Processing fees for 1A60 series aluminum rod held steady, while fees for 6/8 series were stable; fees for low-carbon 6/8 series decreased by 98 yuan per tonne. Simultaneous increases in domestic and international supply have dampened market sentiment. Continued northbound shipments of southern goods have led to a weakening in spot quotations across the board, with the rebound in futures prices facing pressure from increased short positions. As current prices are in a low valuation range, there is some resistance at the bottom, leading to continued low-level consolidation in the short term. Macro sentiment has further heated up. Hurdles in strait transit, coupled with expectations for resumption in the Middle East and the release of accumulated aluminum ingot stocks, have further weakened the outlook. Exports combined with downstream restocking on dips are jointly digesting inventories, with the resilience of social inventory drawdowns remaining strong. In the short term, aluminum prices continue their recovery trajectory, driven by both the return of macro risk premiums and accelerated destocking.
Industrial Silicon & Polysilicon:
On the 21st, industrial silicon prices showed weakness with volatility. The main 2609 contract closed at 8,275 yuan per tonne, down 0.66% for the day, with open interest increasing by 9,194 lots to 265,000 lots. Baichuan's spot reference price for industrial silicon was 9,093 yuan per tonne, down 7 yuan from the previous trading day. The price for the lowest deliverable grade fell to 8,550 yuan per tonne, with the spot premium widening to 330 yuan per tonne. Polysilicon prices also showed weakness with volatility. The main 2609 contract closed at 33,760 yuan per tonne, down 0.19% for the day, with open interest decreasing by 1,387 lots to 121,000 lots. The price for the lowest deliverable grade fell to 34,090 yuan per tonne, with the spot premium narrowing to 75 yuan per tonne. Resumption of operations during the wet season in southwestern China is largely complete. News of production cuts at a major plant in Xinjiang and potential cuts due to electricity price hikes in Inner Mongolia has emerged. If the shutdown cycle in the north continues to lengthen, subsequent impacts may gradually intensify. For polysilicon, policy expectations continue to develop. Under the three new energy consumption limit standards for photovoltaics, inspections of actual enterprise energy consumption levels are still ongoing. Spot market weakness persists, with industry inventories accumulating marginally for several consecutive weeks. Polysilicon prices are adjusting near the bottom.
Lithium Carbonate:
Yesterday, the lithium carbonate futures 2609 contract fell 4.22% to 141,620 yuan per tonne, with open interest decreasing by 4,617 lots to 375,000 lots. The LC2701 contract fell 3.63% to 138,640 yuan per tonne, with open interest increasing by 7,715 lots to 116,000 lots. Regarding spot prices, the average price for battery-grade lithium carbonate fell by 7,500 yuan to 144,000 yuan per tonne. The average price for industrial-grade lithium carbonate fell by 7,500 yuan to 140,000 yuan per tonne. The price for battery-grade lithium hydroxide (coarse particle) decreased by 7,000 yuan to 131,500 yuan per tonne. For warehouse receipts, inventory decreased by 336 tonnes to 41,023 tonnes yesterday. On the supply side, weekly production decreased by 307 tonnes week-on-week to 24,548 tonnes. July's lithium carbonate production increased by 90 tonnes month-on-month to 115,410 tonnes. This includes a month-on-month decrease of 4,500 tonnes for spodumene-based production, an increase of 2,700 tonnes for lepidolite-based production, an increase of 1,390 tonnes for salt lake-based production, and an increase of 500 tonnes for recycled material production. On the demand side, July's ternary cathode material production schedules increased by 3% month-on-month to 89,690 tonnes. LFP cathode material schedules increased by 7% month-on-month to 536,850 tonnes. Cobalt acid lithium schedules increased by 3% month-on-month to 7,740 tonnes. Manganese acid lithium production schedules decreased by 1% month-on-month to 10,770 tonnes. Lithium battery production schedules increased by 7% month-on-month, with domestic schedules up 7% and overseas up 4%. Domestically, ternary power battery production schedules increased by 7% month-on-month, LFP power battery schedules increased by 9%, and LFP energy storage battery schedules increased by 4%. Regarding inventories, large-sample weekly inventories decreased by 4,714 tonnes week-on-week to 119,667 tonnes, while small-sample inventories decreased by 2,599 tonnes to 89,637 tonnes. Based on the large-sample caliber, inventories in other sectors decreased by 6,875 tonnes week-on-week to 54,752 tonnes. Smelter inventories increased by 858 tonnes to 13,273 tonnes. Downstream inventories increased by 1,303 tonnes to 51,642 tonnes. Yesterday, futures prices experienced a significant decline, at one point falling over 7%. However, looking at the stock market, lithium mining stocks showed some rebound, suggesting market bearish sentiment may be gradually being digested. Attention should be paid to spot price support and the potential expectation gap arising from marginal supply increases.
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